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Siddhartha Kumaran
More curious than the cat!
Asked a question 5 months ago

How are entry and exit stop losses different?

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  1. Entry stop loss orders are used to enter trades after a specific price point is breached. For instance, say you want to buy a stock currently trading at 90 only when it breaks above the 100 mark. To achieve this, you will need to place an SL buy order at 100. Entry stop loss trades are used for trading breakouts. We used to do it all the time when trading Crude and natural gas inventory on Wednesdays and Thursdays. 
  2. Exit stop loss orders protect your capital from further losses if the trade goes against you. For example, You entered a buy position at 100, and you placed a stop loss at 95 to square off your position if it reaches the price. This helps to limit your losses to 5. Simple.